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GasLog acquires LNG carriers from BG Group

LNG Industry,

Following GasLog Ltd’s announcement that it had completed the acquisition of three ships from BG Group affiliate Methane Services Ltd (MSL), GasLog announced that it had acquired an additional three LNG carriers from MSL and to charter those ships back to MSL for six-year initial terms on average. The time charters back to MSL for the vessels will be staggered with terms of 5.5 years, 6 years and 6.5 years, similar to the vessels acquired from MSL, so that the vessels do not redeliver at the same time. MSL will also have options to extend the term of the time charters for two of the ships for a period of either three or five years at its election.

The vessels to be acquired from MSL are 2007-built sister ships of the three vessels earlier acquired. GasLog oversaw the construction of all six sister ships and provided technical management for the ships since their delivery. The aggregate cost to GasLog for the three ships party to the transaction is expected to be approximately US$ 468 million.

Each LNG carrier to be acquired is modern, steam powered and has a capacity of 145 000 m3. The Company estimates that upon their acquisition, these ships will represent approximately US$ 425 million of incremental contracted revenue over their initial charter terms and add over US$ 50 million per annum to GasLog’s EBITDA1. For the year ended 31 December 2013, the company had consolidated revenues of US$ 157.2 million and consolidated profit of US$ 56.9 million.

Paul Wogan, CEO of GasLog, said yesterday: “We are very pleased to be doing a second transaction with BG Group to acquire three more on-the-water vessels in addition to the three vessel acquisition that we completed today. The transaction supports our strategy of consolidating the LNG carrier market by acquiring high quality assets. The ships will be chartered back to an affiliate of BG Group, thus increasing our backlog of contracted revenue to almost US$ 3 billion. This strengthens our underlying business and provides a very strong base from which to continue to expand our fleet in the future. We expect the transaction to be accretive to our earnings and support increased dividend capacity. This transaction also further strengthens our long-standing relationship with BG Group.”

The closing of the transaction is subject to the satisfaction of certain conditions, including the completion of definitive documentation and necessary financing. GasLog expects the transaction to close in the third quarter 2014.


Adapted from press release by Ted Monroe

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